System Dynamics in Action: The Worse-before-better Scenario in the City Hospital – Effects of Budget Distribution to the Training & Education Department on Short-term and Long-term Profits

A major public city hospital is affected by the ongoing
transformation in the Swiss health care system due to cost reduction
pressure, mergers acquisitions and the mandatory introduction of
Diagnosis Related Groups (DRG) by the year 2012. Facing scarce
financial and personal recourses, a System Dynamics research project
investigates how changes in budget allocation to the training and
education department can affect the net profits of the hospital. The
model simulation indicates that neither a massive cut, nor a massive
increase of budget lead to the best profits in the long-term. Rather
a carefully implemented adjust­ment of the budget at a small
scale of plus 10% is suggested to realize an increase of the
long-term profits. The results of the long-run simulation are
counterintuitive and are explained by means of systems approach
archetypes like the worse-before-better scenario, information
delays, level effects and limits to growth.

type

conference paper (English)

name of conference

ISSS2011 (Hull, UK)

date of conference

17-07-2011

title of proceedings

Proceedings of the 55th Annual Meeting of the ISSS

review

external review

citation

Buergi, M., & Jung, R. (2011). System Dynamics in Action: The
Worse-before-better Scenario in the City Hospital – Effects of
Budget Distribution to the Training & Education Department on
Short-term and Long-term Profits. In Wilby, J. (Eds.), Proceedings
of the 55th Annual Meeting of the ISSS.

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